It’s not just about the rent. Here’s where the real savings are hiding.
Many companies overpay on their lease – not because the rent is too high, but because they miss opportunities buried in the fine print.
Here are the top six areas where smart negotiation can lead to significant savings over the life of your lease.
1. Get the space right
Leasing too much space is one of the most common – and costly – mistakes.
Excess space means paying for square metres you don’t need. Subleasing might seem like a solution, but it’s rarely simple. Subleasing brings its own risks, responsibilities, and often takes longer than expected to fill.
Leasing too little space can be just as damaging. Crammed offices, inefficient workflows, and constant reshuffling of staff take a toll on performance.
Getting the size right – based on how your team works today, not outdated planning ratios – is one of the best ways to reduce cost without compromise.
2. Maximise the incentive
A lease incentive is the landlord’s offer to win your tenancy. It can take the form of a rent-free period, a cash contribution to your fit-out, or both.
But it’s not just about how much the incentive is – it’s about how it’s structured.
- Is the rent-free period staggered or upfront?
- Is the fit-out contribution tied to conditions or capped unfairly?
- Can unused incentive be converted to rent relief?
These details affect cash flow and flexibility. With expert negotiation, the same face-value incentive can be structured to deliver far greater value.
3. Get landlords to do more work
Landlords often agree to carry out works before you move in – upgrades, services, or modifications. These are known as landlord works.
Many tenants ignore these or leave them vague in the lease. But landlord works are real money. If you don’t negotiate them upfront, you may end up paying for upgrades later out of your own fit-out budget.
For example:
- upgrading ceiling tiles
- replacing carpet
- adjusting lighting layouts
- base-building modifications.
These costs can easily run into tens or hundreds of thousands. Make them the landlord’s cost – and get it in writing.
4. Lock down the make-good
The “make good” clause requires you to restore the office to its original condition at the end of the lease.
Left vague, this clause becomes a ticking time bomb.
Tenants often receive huge reinstatement bills after vacating – and by that point, it’s too late to negotiate.
Instead, agree to one of the following:
- A fixed make-good cost per square metre (e.g. $300/SQM).
- A “broom-clean” clause (leave it tidy, nothing more).
- Or ideally, remove the obligation altogether.
This alone can save you six figures at lease end.
5. Understand the rent game
Landlords prefer not to lower the base rent. Why? Because rent is tied to the building’s value.
Lower rents mean lower valuations – something landlords want to avoid.
Instead, they’ll offer a high rent and pair it with a generous incentive to lower the effective rent (what you really pay over the lease term).
You can still negotiate – just focus on the effective rent, not the headline number.
Benchmarking is key. What are similar tenants paying for similar space? What incentives are available in your submarket?
That’s how you get a better deal – without fixating on the face rent.
6. Limit the annual increases
Most leases include an annual rent increase. That’s normal. But how it’s calculated matters.
- Fixed percentage increases (e.g. 4%) lock in predictable rises.
- CPI-linked increases fluctuate – which can be risky in high-inflation periods.
- Market reviews allow your landlord to adjust the rent to “market” – which may not favour you unless capped.
Whatever you agree to, avoid a ratchet clause. This clause stops your rent from ever decreasing, even if market rents fall. It locks in upward-only adjustments.
That’s bad for flexibility – and bad for your bottom line.
Smart leasing is about the whole deal
Savings come from more than just rent per square metre.
They come from how you use space. How incentives are structured. Who pays for works. What’s buried in the lease. And how you protect yourself at lease end.
All of these details are negotiable. But only if you know what to look for – and how to ask.
